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Southeast Asia from Scott Circle: Engaging Southeast Asia in a Time of Flux

November 17, 2016

Engaging Southeast Asia in a Time of Flux

Welcome to our rebooted Southeast Asia from Scott Circle newsletter. The newsletter will continue to bring you commentary about U.S. engagement with Southeast Asia and highlights of key developments in the region on a biweekly basis. We are also consolidating our SitRep announcements and program highlights into this one regular update.

I owe a huge debt of gratitude to my predecessor, Ernest Z. Bower, who launched this newsletter seven years ago and built the Southeast Asia program at CSIS into a formidable platform for sustaining high-level policy focus on Southeast Asia. As many of you know, I joined CSIS in June to lead this program, and my overriding goal is to maintain the spotlight on Southeast Asia in Washington, D.C.

This focused attention is more critical than ever during this time of transition to a new U.S. administration, one that may well have very different foreign policy priorities and perhaps a distinctive approach to Asia and the world. Donald Trump was an unconventional candidate who ran an unconventional campaign, and while some of his views on foreign policy are well known, it remains to be seen how his campaign rhetoric on trade and alliances will translate into actual policies.

As of this writing, his foreign policy team has not yet been announced, making it difficult at this point to make predictions about whether a Trump administration will maintain the basic contours of Asia policy that have guided both Democratic and Republican administrations for decades, or whether the new president will question traditional assumptions and seek to chart a new course for U.S.-Asia relations.

This uncertainty is creating some understandable and palpable anxiety in the region. Moreover, this political transition in the United States is occurring at a time of unusually high flux and uncertainty in the region itself. Domestic political developments in several Southeast Asian countries have reshuffled their priorities and alignments and raised questions about the future trajectory of the region.

In the Philippines, President Rodrigo Duterte has sought rapprochement with China over maritime disputes in the South China Sea and has signaled a shift in U.S.-Philippine relations, including scaling back joint military exercises and other forms of cooperation. Malaysia has also moved toward closer defense and economic ties with China at a time when Prime Minister Najib Razak remains mired in the 1Malaysia Development Berhad (1MDB) corruption scandal.

Meanwhile, Thailand is in the third year of military rule since the overthrow of its civilian government in May 2014—the second coup in a decade—and deeply mourning the loss of their beloved King Bhumibol Adulyadej. Indonesian president Joko Widodo continues to focus heavily on domestic policies rather than exerting Indonesia’s traditional influence over regional affairs. In many ways Myanmar is a bright spot in the region as it continues its remarkable political transition under Aung San Suu Kyi’s leadership, yet formidable obstacles to full democratization and reconciliation remain.

These internal dynamics in Southeast Asian countries have created a leadership vacuum in ASEAN, causing drift and divisions within the organization, particularly over the issue of how to respond to China’s increasingly assertive behavior in the South China Sea. Whether ASEAN can maintain its centrality without unity is an increasingly relevant question. Overt friction in the South China Sea has eased in recent months, but the underlying tensions and concerns about China’s behavior remain and will continue to drive the strategic calculus of claimants and other countries in the region.

There is also growing uncertainty about the emerging economic landscape in Asia. Although the economic prospects of many Southeast Asian countries look bright—particularly for Vietnam, the Philippines, and Indonesia—the region relies heavily on trade and access to global markets. Yet global trade has been declining since 2007, and the failure of trade talks— including what looks now to be a failed effort to launch the Trans-Pacific Partnership (TPP), which would have linked the United States with 11 Asia-Pacific trade partners—raises questions about the ability of countries in the region to get back on track with trade liberalization.

Certainly, it raises profound questions about American economic and strategic leadership in Asia. Whether the collapse of TPP will inject momentum into regional negotiations led by China and ASEAN for a Regional Comprehensive Economic Partnership (RCEP) remains to be seen. It is also unclear how meaningful an RCEP deal would be in terms of trade liberalization and economic integration. But key countries, including the Asian TPP signatories as well as China, are likely to want to fill the economic void created by TPP’s demise.

In short, we are entering a period of strategic flux as policy shifts on both sides of the Pacific may reshuffle economic and security alignments. It is worth keeping in mind that America’s interests in Asia are deeply rooted and enduring. There remains tremendous economic opportunity in Southeast Asia for U.S. businesses and workers. Many American states that supported Trump remain tied to agricultural exports that depend on access to world markets.

And, according to recent Pew and Chicago Council on Global Affairs polls, Americans continue to favor free trade by a large margin. Moreover, the strategic stakes for U.S. engagement in Southeast Asia, and for upholding a rules-based order that preserves peace and prosperity for everyone in the region, remain extremely high. These kinds of strong national interests tend to win out in the end, although the twists and turns of U.S. policy developments in the short run in a Trump administration are harder to predict.

In this critical moment as we begin the next chapter of U.S.-Asia relations, the CSIS Southeast Asia program remains committed to bringing you our assessment of the latest developments and emerging trends in the region, and providing policy analysis and recommendations as president-elect Trump and his team begin the task of policy formulation. Now more than ever, close communication and exchange of ideas and perspectives across the Pacific are needed to inform policy choices and maintain strong ties, and we will strive to further strengthen and highlight this dialogue.

Biweekly Update

Southeast Asia reacts to Trump election
Myanmar’s presidential spokesperson expressed high hopes for continuing bilateral relations under U.S. Republican leadership, noting that Senators John McCain and Mitch McConnell were key supporters of U.S.-Myanmar relations. The Indonesian Foreign Ministry downplayed Trump’s previous anti-Muslim statements as campaign rhetoric and expressed confidence that the “United States will continue to be a country that respects tolerance.” In his congratulatory message to the president-elect, Cambodian prime minister Hun Sen highlighted the foresight of his own endorsement of Trump.

Philippines halts some military exercises with U.S., preserves EDCA
Philippine president Rodrigo Duterte on November 8 announced that the Enhanced Defense Cooperation Agreement (EDCA) with the United States will continue, while some joint U.S.-Philippine military exercises will be scaled back. Exercise Balikatan will continue while the Philippine-U.S. Amphibious Landing Exercise (PHIBLEX) and the Cooperation Afloat Readiness and Training (CARAT) exercise have been canceled. According to a Philippine Defense Department spokesperson, annual joint drills have been reduced from 13 to 6 or 7. Duterte has said he wants all foreign troops out of the Philippines by the end of his term in 2022.

Duterte cancels police rifle purchase after U.S. halts sale
President Rodrigo Duterte on November 7 canceled an existing order between U.S. firearms manufacturer SIG Sauer and the Philippine National Police for 26,000 assault rifles and said the Philippines would explore other options for arms purchases. The State Department had earlier halted the sale after Senator Ben Cardin, senior Democrat on the Senate Foreign Relations Committee, expressed concerns about human rights violations stemming from extrajudicial killings linked to Duterte’s war on drugs. Duterte’s police chief created some confusion a few days later by saying that the president would allow the sale to proceed.

Hard-line Islamic groups lead protest of Jakarta governor
On November 4, more than 150,000 protesters descended on Jakarta to demand the immediate prosecution of Jakarta’s governor, Basuki Tjahaja Purnama, for blasphemy. The charges stem from Purnama, an ethnic Chinese Christian, publicly criticizing arguments that the Quran forbids Muslims from voting for non-Muslim leaders. The protests, which included members of various hard-line Muslim organizations, were seen by some analysts as prompted by domestic politics and an attempt to attack President Joko Widodo ahead of presidential elections in 2019. Purnama served as Widodo’s deputy when Widodo served as governor before he was elected president.

Thai crown prince expected to ascend the throne on December 1
Crown Prince Maha Vajiralongkorn is expected to ascend to the Thai throne on December 1. The crown prince, who traveled to Germany to attend to personal matters following his father’s death on October 13, returned to Thailand on November 11. Prime Minister Prayuth Chan-o-cha said that the ascension will take place “in accordance with the constitution, palace law, and tradition.” The coronation will follow the cremation of the late King Bhumibol Adulyadej, which is expected in late 2017, about a year after his death.

Violence continues in Myanmar’s Rakhine State
Myanmar government officials said 34 people were killed after they attacked government troops in western Rakhine State on November 12, but Muslim Rohingya villagers insisted the victims were civilians and unarmed. Government troops have been conducting counterinsurgency sweeps since nine police were killed in attacks along the Bangladeshi border on October 9. Diplomats from the United States, United Kingdom, China, and the European Union visited Rakhine on November 9 as part of a UN observation delegation, the first granted access since the October incident. Some aid agencies also accessed previously restricted areas to distribute humanitarian aid.

Hun Sen breaks ground on next phase of rural roads project
The first phase of Cambodia’s rural roads project, completed on November 2, upgraded 340 miles of dirt roads to concrete at a cost of $68.6 million from government coffers. The second phase, to be completed in 2020, will expand the road network to 10 provinces and receive $54 million from the Asian Development Bank, $41 million from South Korea, $18.5 million from Australia, and $17.8 million from the Cambodian government. In total, 750 miles of improved road will be built.

Laos moves forward on third Mekong dam project
Construction on the 912-megawatt Pak Beng Dam, located in northern Laos, is slated to begin in early 2017. The ruling Lao People’s Revolutionary Party sees hydropower development as a critical source of Lao exports and views the dam as crucial for the country’s further economic development. Critics of the project cite as causes for concern a downturn in energy consumption in neighboring countries, the lack of an agreement between China and Laos over water management in the upper Mekong River, the potential negative environmental impact in Cambodia and Vietnam, and food security vulnerabilities.

Thai government earmarks $3.6 billion for rice subsidy scheme
Amid falling rice prices, the Thai government is encouraging farmers to delay selling their rice crop and participate in a new rice subsidy scheme. Commerce Minister Apiradi Tantraporn expects 700,000 farming households in central Thailand will benefit from the scheme. Former prime minister Yingluck Shinawatra’s trial for negligence in her administration’s failed rice subsidy scheme prior to her ouster in a coup in 2014 is currently under way. Yingluck was fined $1 billion and faces up to 10 years in prison.

Singapore limits next presidential election to ethnic Malay candidates
Singapore has decided to change the rules governing the election of its president to ensure representation from all major ethnic groups. Under the new rules, a presidential election will be limited to candidates of a particular ethnicity if five consecutive terms pass without a president of that ethnicity. The new system will limit the 2017 presidential election to ethnic Malay candidates. A Malay has not served as president since direct elections for that office were instituted in 1991.

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